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Non-Office subscribers will also experience price drops. The price of 100GB of storage will decrease from $7.49 per month to $1.99. Microsoft is dropping the price on its 200GB offering from $11.49 to $3.99.

The price drops will keep Microsoft on pace with rivals such as Google, which also offers 15GB of free storage with Google Drive. But competition for the storage market is about more than just the storage offerings themselves.

"Storage isn't super interesting," said Angus Logan, Microsoft's head of product management and marketing for OneDrive. "What we build on top of storage is.

"We're not trying to just be in the storage game where we break even because storage is the only hammer we have to swing... But if we can say that we want to deliver productivity across all your devices - and it also comes with cloud storage - then it really changes the game from being focused only on storage."